Disability Insurance News
2006 Study: Retirement Plans Crumble in the Face of Disability
What happens when a paycheck stops? As you might imagine, the family juggles their bills to make ends meet, changes their lifestyle and often drains their saving resources. What happens with the family's retirement savings and health insurance premiums? Both of these expenses are typically deducted from employees' paychecks. So, when the paycheck stops, so do the deductions.
According to a 2006 survey conducted by Guardian Life Insurance Company of America, 48 percent of Americans say they would probably have to stop contributing to their retirement accounts should they become disabled.[1]
An interruption of contributions seems minor, but do the math and you'll discover that it's costly. For example, a two-year interruption in contributions could easily result in $60,000 less accumulated savings at retirement.[2]
References
- Guardian Life Insurance Company of America, "Insurance & Behavior – Spotlight on IDI," www.GuardianLife.com, 2006.
- Assumes a $10,000 annual contribution at an 8 percent return over a 20-year period.